How Much Does InvesTech Holdings' (HKG:1087) CEO Make?

Ringo Chan has been the CEO of InvesTech Holdings Limited (HKG:1087) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether InvesTech Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for InvesTech Holdings

How Does Total Compensation For Ringo Chan Compare With Other Companies In The Industry?

At the time of writing, our data shows that InvesTech Holdings Limited has a market capitalization of HK$145m, and reported total annual CEO compensation of CN¥3.8m for the year to December 2019. Notably, that's an increase of 63% over the year before. We note that the salary portion, which stands at CN¥3.71m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.5m. Hence, we can conclude that Ringo Chan is remunerated higher than the industry median. What's more, Ringo Chan holds HK$9.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 67% of total compensation represents salary and 33% is other remuneration. InvesTech Holdings has gone down a largely traditional route, paying Ringo Chan a high salary, giving it preference over non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

InvesTech Holdings Limited's Growth

InvesTech Holdings Limited has seen its earnings per share (EPS) increase by 42% a year over the past three years. It achieved revenue growth of 8.8% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has InvesTech Holdings Limited Been A Good Investment?

Since shareholders would have lost about 73% over three years, some InvesTech Holdings Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Ringo receives almost all of their compensation through a salary. As we touched on above, InvesTech Holdings Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the EPS growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Although we'd stop short of calling it inappropriate, we think Ringo is earning a very handsome sum.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for InvesTech Holdings you should be aware of, and 1 of them is potentially serious.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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